Pharmacy Coverage Policy

Prescription Requirements

All medication is dispensed on the basis of a written prescription from the prescribing provider. Exceptions are allowed in emergency situations. In those instances where an emergency arises, a 72 hour supply of medication may be dispensed on the basis of a phone-in prescription. Emergency prescriptions are not refillable. An example of an emergency situation is a physician phoning in an antibiotic for a child over the weekend. A 72 hour supply of medication may be dispensed until a written prescription can be obtained.

Rebate Agreement

Only those drug products that are manufactured by pharmaceutical companies that have signed a rebate agreement with HCFA pursuant to the Omnibus Budget Reconciliation Act of 1990 will be reimbursed.

Brand Necessary

In those instances where a medication is subject to Federal or State Upper Limits and the prescribing provider feels the brand name is necessary, the following procedure must be followed to ensure payment of the brand name. The prescribing provider must sign on the dispense as written line for the brand name product and indicate on this prescription the medical reason why the recipient cannot take a generic substitution. The pharmacist then faxes the request to Pharmacy Services (at (401) 462-6336) to get approval for this recipient. Verbal authorization will be given if the prescription meets all the above criteria. This approval will be temporary until a copy of the actual prescription is sent to Pharmacy Services for their files. Failure to do so will result in removal of the approval. This approval will expire one year from the date of issuance. At that time a new authorization will be needed.

In those instances when a brand name product is subject to Federal or State Upper Limits and is dispensed without brand name approval, the upper limit price will be reimbursed.

Prior Authorization

Prior Authorization is required for all drugs not included within the scope of the Medicaid Program. A prior authorization form must be signed by the prescribing provider and forwarded to the pharmacy where the prescription is to be filled. The pharmacist will then submit to the Medicaid Program this form for approval. Approval will be granted on the basis of the required information that was supplied. This prior approval will last for the duration of the prescription.

In general, the types of drugs not included are the following:

The more expensive corticosteroid and anabolic hormones (oral only)

Anorexiants (all types, limited to a three-month approval only)

Expensive vitamins, hematinics and lipotropic preparations, the total charge of which is in excess of $10.00 per pint of liquid or 100 capsules or tablets and/or those drugs prescribed in quantities of less than 100 capsules, tablets or pint of liquid.

Central nervous system stimulants for recipients over the age of 21.

Covered vaccines.

Refillable Medication

A maximum of 5 refills (except where Federal or State law prohibits) is allowed for those medications required for the continuous treatment of chronic conditions. Payment will not be allowed for any prescription refilled after one year from the date of service. It is the responsibility of the pharmacist not to refill any prescriptions when it is apparent to him/her that at least 75% of the previous prescription has not been utilized in accordance with the physicians directions. All non-maintenance medication is limited to a 30-day supply.

The following categories of medication are not refillable and require a new written prescription at all times (with the exception of emergencies):

The original prescription may be dispensed in the quantity that the prescribing provider indicates on the prescription. Refills are to be dispensed in quantities of 100 tablets, capsules or pint of liquid or a 30-day supply, whichever is greater, to a maximum of 200 capsules or tablets or pint of liquid. The following maintenance medications must be dispensed in quantities of 100 capsules or tablets or a pint of liquid at all times: Digoxin, Vitamins, Hematinics, and Nitroglycerin (excluding patches). Prescriptions for quantities of less than 100 or pint of liquid require Prior Authorization.

Pharmacy Billing Procedure

Payment for medication is subject to the following conditions:

Professional Dispensing Fees:

Pharmacies dispensing to recipients residing at home will receive a $3.40 dispensing fee for all legend drugs in addition to the allowable cost of the drug.

Pharmacies dispensing to recipients residing in a facility will receive a $2.85 dispensing fee for all legend drugs in addition to the allowable cost of the drug. Dispensing limitations are as follows: one prescription per month per patient per medication. Any subsequent billing within a thirty day period for the same medication will result in a non-payment of that prescription.

In accordance with Federal Regulations, the upper limit for payment for prescribed drugs - whether legend items or non-legend - will be based upon the amount allowed by the Medicaid Program or the usual and customary charge to the general public, whichever is lower. The Usual and Customary charge must include all group discounts (i.e., 10% Senior Citizen) when applicable to a Medicaid Recipient or any sale price that might apply at a particular point in time.

Payment for over-the-counter drugs will be based upon the lowest of:

The allowable cost of the drug plus a 50 percent, but no less than a $2.00, minimum charge per prescription;

The allowable cost plus the appropriate dispensing fee;

The usual and customary charge to the general public.

The amount allowed for a multiple source drug for which an upper payment limit has been established as required by 42 CFR §447.331(a) will be the lower of:

The upper limit established by the federal Health Care Financing Administration pursuant to 42 CFR §447.331; or

The usual and customary charge to the general public (including all discounts such as senior citizen discounts), or if lower, the amount reimbursed by other third party payors; or

The estimated acquisition cost, which shall be the manufacturer’s reported Wholesale Acquisition Cost.

The amount allowed for brand name drugs and drugs other than multiple source drugs for which a specific limit has been established as required by 42 CFR §447.331(b) will be the lower of:

The usual and customary charge to the general public (including all discounts such as senior citizen discounts), or if lower, the amount reimbursed by other third party payors; or

The estimated acquisition cost, which shall be the manufacturer’s reported Wholesale Acquisition Cost.
There is no provision for payment for containers or compounding services.

Limitations Pertinent to Drugs and Pharmacy Services

Payment will not be made for the following drugs and supplies:

New or experimental drugs in a state of preliminary trial and drugs of doubtful efficacy.

Drugs available through existing community-sponsored programs; i.e., drugs used in the treatment and/or prevention of venereal diseases, gamma globulin for prevention of infectious hepatitis and the prevention or modification of measles and other biologicals provided by the Rhode Island Department of Health and other official and voluntary health agencies.